Gender schema theory proposes that sex-typed behaviour flows from the child's ability to ‘tag’ incoming information in terms of gender categories leading to heightened attention, recall and performance of sex-congruent behaviour. We investigate three questions in relation to this proposal: (1) the order of emergence of the child's ability to apply gender labels in each of three domains (social behaviour, same-sex peer preference and sex-congruent toy preference) and its impact upon sex-typed behaviour, (2) the role of the child's knowledge of his or her own sex in sex-typed preferences, and (3) the generality versus specificity of sex-typed behaviour across three domains. Participants were 56 two-year old children. Correct labelling of gender was achieved by 67% of children for self, by 54% for other children, by 23% for toys and by 13% for activities. There was a significant preference for sex-congruent toys and boys engaged in significantly more negative social interaction behaviours than did girls, but same-sex peer preference was not found. There was no effect of domain-specific labelling ability on corresponding sex-typed behaviour nor did sex-of-self knowledge explain sex-typed preference. There was no evidence of domain generality in sex-typed behaviours. The findings suggest that the impact of cognitive variables may have been overestimated.